Nasdaq 100 and S&P 500 futures: break down or hold up?

A look at Nasdaq 100 and S&P 500 futures daily charts

The NQ and ES daily charts are at important junctures as the Q4-Q1 broad rally grinds on (such as it is). Market sentiment indicated the need for a stock market pullback back in January, and it has come about. Now the rally is being tested, without much room to the downside left in order to keep things intact.

There is a lot more to managing the markets than a man staring at a chart. There are the macro considerations of the economy, of monetary policy, of inflation/deflation dynamics and hence, interest rates on bonds. But insofar as men and women stare at their charts…

…the technical situation also matters. In this case for Nasdaq 100 and S&P 500 futures (NQ & ES) let’s look at the daily charts.

NQ is testing its break above the major downtrend marker at the 200 day moving average, which coincides with clear lateral support. The SMA 50 is rising to meet that area as well. You don’t need Captain Obvious to tell you that this is an important juncture. At the beginning of February the rally stopped where it should have, with market sentiment over-bullish and at a clear resistance point. It’s all normal thus far.

Nasdaq 100 futures (NQ)

ES is testing its 200 day moving average as well, a tick below the SMA 50 and above clear lateral support at around 3913. It is advised to hold that level to keep things normal. Beyond that NFTRH 746 managed the parameters that would indicate ‘bear market back on’ and potential shorting opportunities for those would go that route (cash is a safer option). But for now the US markets are intact and putting on a test of that status.

S&P 500 futures (ES)

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